“We face a condition, not a theory,” assert those employers who defend their adaptation of wages to the tipping custom. “The public seems determined to bestow gratuities, and if we paid full wages in addition, our employees would be the highest paid workers in the world.”

But two wrongs do not make a right.

THREE KINDS OF EMPLOYERS

Employers who profit by tipping are classified as follows:

1. Those who pay living wages and positively forbid gratuities.

2. Those who pay average competitive wages and maintain a passive attitude toward gratuities.

3. Those who pay minimum, or no, wages, and aggressively exploit the propensity to give.

At present the first class constitutes almost an infinitesimal minority. Here and there in large cities there are barber shops which advertise a “No-Tip” policy, and occasionally a hotel or restaurant.

In the second class are most of the moderate-price places catering to the public. The employers and employees welcome gratuities but do not make them the prime object in their relations with patrons.

The third class includes the high-grade hotels, sleeping car companies, expensively conducted restaurants and like enterprises. This is the class which sets the pace through the patronage of the socially or financially prominent.

A few of the more noteworthy employers who profit by the custom follow:

The Pullman Company,
The Hotel Company,
The Taxicab Company,
The Transfer Company,
The Steam Ship Company,
The Master Barber,
The Apartment House Owner,
The Restaurant,
The Telegraph Company.

That an organized conspiracy exists between employers and employees to exploit the public is realized vaguely, if at all, by the average patron.

Proof of this allegation may be found at the cashier’s desk of almost any restaurant or hotel. The waiter invariably is given change that will make it easy for the patron to tip. He returns with the change arranged in such a way on the tray that the patron must fumble over all of it if he wants the full amount. The employer’s and the waiter’s theory is that, rather than do this, he will leave a dime or a quarter in one corner. In a barber shop the patron always receives small change so that it will be easy to “remember” the porter.

Yet, such a practice is the mildest indictment that may be brought against employers for entering a conspiracy to exploit patrons.

SELLING THE TIP PRIVILEGE

In New York and Chicago particularly, many employers went so far (and still maintain the practice) as to sell to outside persons and companies the privilege of collecting the tips in their places of business. That is to say, these outside parties were to furnish waiters, cloak room attendants and other employees to the hotel or restaurant and depend upon the tips for their remuneration.

So large was the sum realized from tips that the hotels and restaurants actually charged the outside parties thousands of dollars for the concession. In Illinois a law was passed in 1915 aimed directly at this organized phase of the custom. It prohibited hotels and others from selling tipping privileges. The men who owned such privileges promptly went to law to test the constitutionality of the act. To the tip-taker anything is unconstitutional that interferes with his graft!

At the time the law went into effect, the situation was reported in the Chicago Tribune as follows:

“The state will have a fight on its hands before the Chicago tip trust ... releases its clutch on the pocketbooks of hotel and restaurant patrons.

“At midnight last night ... there was no indication the largess was going anywhere else than it has gone before ever since a commercial genius capitalized the well-known generosity of the dining and wining public straight into the coffers of the trust.”

The manager of one of the leading hotels said that lawyers for the hotel had served notice on the head of the biggest of Chicago’s three tip trusts to withdraw his minions.

“Do you contemplate returning part of the money paid for the concession?” he was asked.

“That,” the manager replied, “is a detail.”

“Do you think it possible (the head of the tip trust) will resist expulsion?”

“Hardly. We’ll just put in a crew of our own and that will end it.”

“Have you heard a report that the tip trusts contemplate standing by their guns and, if necessary, charging a 10 cent fee for checking hats and coats, anticipating the tip?”

“That’s preposterous.”

After such evidence, patrons of hotels and other public service places hardly will feel as cheerful in giving tips as they may have felt before being enlightened. Here was a typical instance of a hotel advertising such and such rates for rooms and food with the plain inference that patrons had no other obligation. Then the management goes out and sells the right to exploit the patrons, thereby filling its dining rooms and cloak rooms with employees who must exact tips if they are to be paid at all for their work!

ARE YOU A BENEFACTOR?

A small part of the public cares nothing about this and will tip regardless of the conditions of employment of the servitors. This element simply enjoys the grandiloquent role of Bestower of Largess. But the vast majority of Americans has followed the custom under duress. This majority finds it repugnant to tip on the assumption that the employee alone profits by its generosity; and to discover that the employer as well profits by it in fact secretly devises methods of encouraging the tipping will confirm the majority in the thought that the custom is wholly bad.

Under which school of economics, or ethics, can such a system be justified?

The assertion of employers that tipping is the spontaneous impulse of patrons and that they cannot afford to pay living wages in addition is seen to be without foundation in conspicuous instances. Such spontaneity as exists they stimulate and exploit for their own profit.

Conceding that the development of tipping has thrown employment upon an abnormal basis, the question arises, if tipping is abolished should the increase in wages be borne exclusively by the employer?

To the extent that employers make extraordinary dividends out of the custom the extra cost of operation through normal wages should be borne by them without increased tariffs to patrons. Competition in the hotel business, for example, has been adjusted to the custom of tipping and the sudden throwing of a bona fide wage system upon such employers, without an increase in revenues, would be disastrous.

A REASONABLE SOLUTION

The solution in certain instances might be found in a joint obligation of patron and employer. The employer says: “I have been able to give you food at such and such a price because I have not had to charge to it the cost of waiter hire. If the public discontinues gratuities to my employees, I must raise the price of food to cover this deficit.” The patron replies: “Upon proof that your food tariffs have not included the item of waiter-hire, I will pay more for my meals if they are served free.”

The goal of a reform in tipping is to make one payment and that one to the employer cover every expense of the patron.

Even if the public should have to pay more for food, lodging and other service, if tipping is abolished, an immense advance in sound economics and democratic ethics would be made in eliminating the double-payment system. Where two payments are made to employer and employee it is inevitable that the patron will lose.

It should be understood, however, that a large part of the $200,000,000 or more given annually by Americans in gratuities is sheer waste because it is given for absolutely nothing in return. Such waste should be eliminated without consideration of employer or employee.

So long as employers assume that the public will pay part or all of the wages of employees, so long will the employees be under the necessity of resorting to outrageous tactics coddling the patron who does tip, insulting and neglecting the one who does not tip in order to obtain pay for their services.

Employers must come to the viewpoint that tipping is morally wrong, and therefore of necessity, economically unsound. The money they make out of tipping is tainted money. Employees should be engaged on wages that are adequate without regard to any gratuities that may be given.